Footpaths and Crossovers
Depending on the contract you have with your Builders, paths and driveways on site may be included, or you may need to price them separately.
But have you thought about the footpath out the front of the property? Or the need to add a new crossover, or perhaps replace an existing one to match current requirements?
Councils love to have Developers upgrade anything that’s getting a bit old or cracked, because then they don’t have to pay for it themselves. Make sure you spend time determining the current condition of these Council assets, and allow for their replacement if there’s a chance Council will get you to foot the bill for an upgrade.Power Poles
I could probably write a whole blog post on all the ‘ins and outs’ of power poles and developments. I’ll keep it simple though – relocating them is not cheap. And in many areas, the second you do anything at all involving power, you’ll be required to run everything underground. So make sure you check your Council's requirements and factor this into your feasibility.So…”What else?” I hear you ask...
All the previous hidden costs come under the “hiding in plain sight” category as once you’ve been on site and walked around as part of your due diligence, you should have an awareness of the potential problems, and taken the time to cost out likely solutions. Next up...Transaction & Project Costs
Earlier I mentioned assorted taxes that don’t always make it into a feasibility, but there are MANY other costs as well. These include:
- Agent costs (both buying and selling)
- Legal searches
- Council rates, water rates
- Legal Fees
- Loan application fees
- Loan Interest
Important to note also that some of these costs can seriously eat up a good chunk of profit if a project drags out well past the expected completion date.
So there you have it – the biggest hidden costs in property development are hiding in plain sight. Which means the best way to find them and allow for them is to use your eyes on site and see how many you can find. It’s not the problems of a site that stop a deal from being profitable, it’s the fact you didn’t see them in the first place, so failed to allow for the costs of fixing them.
Remember - you make as much money from the deals you throw away as the ones you take on, so always assess a site with a view to saying “Next!”